NCFE Case: Poulsen to Testify Today on Bribery Charges

Lance K. Poulsen, the alleged mastermind of a scheme to defraud investors who purchased AAA bonds backed by health care receivables, is expected to take the stand in his trial today in federal district court in Columbus, Ohio.

Prosecutors are expected to ask Poulsen about taped conversations he had with his friend Karl A. Demmler last year that indicates the two tried to conceal their attempts to bribe Sherry Gibson, a former colleague and key witness in Poulsen’s upcoming fraud trial.

Judge Algenon Marbley said Saturday after hearing the tapes that "it really does sound like conspiracy," according to the Columbus Dispatch newspaper. "It suggests knowledge that what they were doing was wrong." Marbley made the comments in rejecting a motion by Poulsen and Demmler attorneys seeking to dismiss the case.

So far the words of Paulsen, the former chief executive of National Century Financial Enterprises, have done nothing but haunt him. Even attempts to disguise his action by referring to Gibson as “Mary” on tape haven’t helped.

The Dispatch reported that in the tapes Demmler told Poulsen that “Mary” could be paid monthly checks of no less than $5,000, though not the same amount every month. Poulsen said on the tape that he would wire the money to Demmler from a Charles Schwab account.

Attorneys for Poulsen and Demmler have argued that their clients wanted to give Gibson money so she could afford a new attorney. The government’s case is based on taped conversations between Poulsen and Demmler and a conversation between Demmler and Gibson.

Gibson wore a wire to a dinner meeting with Demmler in 2007 shortly after she was released from prison. The Dispatch reported that Demmler is heard telling Gibson that she could “have amnesia” regarding her dealings at NCFE. “At the same time you need to have some moolah to not remember,” the Dispatch reported Demmler saying. He is reported to have promised Gibson at least one million dollars and as much as $20 million.

Gibson is a former vice president with NCFE, a Dublin, Ohio-based company that financed health care providers. She pled guilty to fraud charges in 2003 and served three years in prison for her part in the company’s demise that led to the collapse of 275 companies.  Five other NCFE executives were convicted earlier this month for their role in the scheme and are scheduled to be sentence in June ("Hospital Debt Buyers Convicted of Fraud and Money Laundering," March 17). They face maximum prison sentences ranging from 55 to 140 years in prison.